Brexit fuels asset management hiring slowdown

The proportion of asset management firms considering hiring over the next three months has slowed to 11 per cent, down from 68 per cent in March, a survey by the CBI and PwC shows.

The last quarter’s financial services survey from CBI and PwC, the first following the Brexit vote, also shows investment managers kept headcount unchanged in the three months to September, marking the first time that it has not risen since March 2012.

Meanwhile, spending on training declined for the first time since mid-2010. In September, 6 per cent of investment managers said they will invest in training, half the figure from June and less than a quarter of the March figure, when it was 25 per cent.

Overall, more than a half of the respondents see a risk of changes being made to UK financial regulation post Brexit, while 40 per cent think the exit from the EU could be a trigger for changes, especially with new entrants in the market.

PwC UK asset and wealth management leader Mark Pugh says: “The referendum result undoubtedly shook the investment markets but there has been a turnaround since then and firms are beginning to return to normal and view the UK’s decision to leave the EU as another important consideration in a long list of challenges.”

The survey, which includes 115 financial services firms, of which 8 are asset managers, shows that overall optimism about firms’ business situation fell for the third consecutive quarter, which was the longest period of declining sentiment since 2009.

CBI chief economist Rain Newton-Smith says that with firms voicing concerns around the aftermath of the EU referendum, “an ambitious” Autumn Statement would set a clear direction for the growth of financial services firms.

He says: “As firms get back into the swing of things after the summer, and continue to digest the implications of the EU Referendum, it’s good to see that demand in the financial services sector has held up.

“But the challenges facing the sector have not gone away – they’ve actually grown. Add the uncertainty caused by Brexit to low interest rates, technological change and strong competition, and it’s plain to see why optimism is falling and pressure on margins remains intense.”